Lamb Weston Gains On Solid Q2 Earnings Beat

Lamb Weston Holdings Inc LW reported second-quarter FY23 sales growth of 27% year-on-year to $1.28 billion, beating the consensus of $1.15 billion.
Volume declined 3%, primarily reflecting an inability to fully serve customer demand in the company's foodservice and retail channel.
Net sales from the Global segment rose 34% Y/Y, Foodservice increased 14%, and the Retail segment climbed 34%.
Gross profit increased 85.7% Y/Y to $381.6 million, and the gross margin expanded 950 basis points to 30%.
The operating margin was 21.3%, and operating income for the quarter jumped 138% to $272 million.
Adjusted EBITDA, including unconsolidated joint ventures, increased 92% Y/Y to $335 million.
Adjusted EPS of $1.28 beat the analyst consensus of $0.74.
Lamb Weston held $419.4 million in cash and equivalents as of November 27, 2022. Net cash from operating activities for six months totaled $288 million.
"We expect the continued implementation of pricing actions to counter higher input and potato costs to drive our financial results in the second half, while our volume performance will continue to be affected by supply chain constraints and inflationary pressures on consumers," said CEO Tom Werner.
Outlook: Lamb Weston raised the FY23 Adjusted EPS forecast to $3.75 - $4.00 from $2.45 - $2.85 versus the consensus of $2.98.
It raised the FY23 sales outlook to $4.8 billion - $4.9 billion from $4.7 billion - $4.8 billion, against the consensus of $4.73 billion.
Price Action: LW shares are trading higher by 8.82% at $95.20 on the last check Thursday.
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